Rajkot Municipal Corporation Raises Rs. 100 Crore Through Municipal Bond Issue
The bond issue, which was oversubscribed by 4.95 times, signals strong investor confidence and highlights RMC’s commitment to fiscal discipline and urban innovation.
In a historic move toward growth and development, the Rajkot Municipal Corporation (RMC) has successfully raised Rs. 100 crore through a municipal bond issue, marking a significant step in strengthening infrastructure and enhancing public services. The bond issue, which was oversubscribed by 4.95 times, signals strong investor confidence and highlights RMC’s commitment to fiscal discipline and urban innovation.
RMC’s Rs. 100 crore municipal bond issue, having a tenure of five years and an AA credit rating by CRISIL, was issued at an interest rate of 7.90%. The bidding took place on the National Stock Exchange’s Electronic Bidding Platform. This financial milestone follows a series of reforms that have steadily improved RMC’s credit rating from A- to AA over the years, underscoring its robust financial health and transparent operations.
As Gujarat’s fourth-largest city and a hub for MSMEs and light automobile ancillary industries, Rajkot has experienced rapid population growth due to substantial migration within Saurashtra. To support this growth, the state government has consistently expanded the Rajkot city limits. The RMC jurisdiction now covers 164 sq km.
RMC will invest the bond proceeds in critical water supply and sewerage infrastructure for newly integrated city areas, including a 23 MLD sewage treatment plant, a 14 MLD elevated storage reservoir, and a 500 km water distribution and sewerage network. The cost of borrowing is also minimised due to a Rs 13 crore interest subsidy provided by the Government of India for cities issuing municipal bonds.
The bond issue will further enhance transparency within RMC. As part of bond compliance, RMC will strengthen internal controls and implement systematic performance review mechanisms, ensuring improved accountability and governance standards.
RMC is setting high standards in municipal governance and aims to match its rating and practices with other progressive cities like Ahmedabad, Surat, Pune and Indore. The Rs. 100 crore bond issue exemplifies its dedication to creating sustainable urban development and a thriving space for its citizens.
The RMC has been a pioneering municipal corporation in Gujarat with several new initiatives. It was among the first in Gujarat to adopt outsourcing and privatisation in the early 1990s. The city also established the state’s first greenfield smart city, a unique 730-acre project developed under the Smart City Mission.
RMC is also a recognised leader in climate action, having received the “One Planet, One City” award for four consecutive years. Recently, it announced an ambitious Net Zero Action Plan to achieve net-zero emissions by 2070.
